24 year old trying to get to millionaire by 35, punch holes in me plan

[wildcat]

Bob Brinker is one of the better respected financial analysts out there, whose portfolio has made a lot of people very rich (nevermind the qqq call), and he is certainly knows more about the market than everyone here. So I would certainly take his word over just about any poster.

He's a distant 2nd to Jim Cramer

Sure is funny how people seek - wink wink - "help" from others and in the end proclaim to have all of the answers. Poke holes in your judgment?? How bout asking the Bobster instead of a bunch of nobodies. Socking away a large chunk of money early will virtually guarantee success even if you invest it all in bull sperm. To each his own, good luck to ya bro.

 

[haha]

2 things, Bob Brinker is one of the better respected financial analysts out there, whose portfolio has made a lot of people very rich (nevermind the qqq call), and he is certainly knows more about the market than everyone here. So I would certainly take his word over just about any poster.

In that case, why are you here?

Ha

 

[youbet]

TromboneAl may actually be Alan Greenspan.

You have something there!! Now that you mention it, everytime I see Alan on TV, I think to myself: "Gee, that guy looks like the kind of guy that would save money by sawing rolls of paper towels in half." That's too much for just coincidence. It's gotta be him!!

 

[dgalbraith100]

In that case, why are you here?

Ha

He wasn't asking our opinion on what we thought of his plan, he was asking for our agreement on his plan. Since that didn't happen, we are all obviously wrong.

I hope I wasn't that much of a know it all when I was 24... oh well, I am sure I was.

 

[AirJordan]

He's a distant 2nd to Jim Cramer

Sure is funny how people seek - wink wink - "help" from others and in the end proclaim to have all of the answers. Poke holes in your judgment?? How bout asking the Bobster instead of a bunch of nobodies. Socking away a large chunk of money early will virtually guarantee success even if you invest it all in bull sperm. To each his own, good luck to ya bro.

Look my argument was basically this, Brinker, and Cramer for that matter, eat sleep and breath stocks, and thus would know more than a person with a normal job, who doesn't focus 100% of their energy on the market. Maybe some of you are that involved with the market and know all of its idiosyncracies. I for one certainly do not, so in that case I defer to someone who does. If people on here know more than Cramer or Brinker good for you, you should start your own newsletter and become multi multi millionaires if it's that easy

 

[AirJordan]

He wasn't asking our opinion on what we thought of his plan, he was asking for our agreement on his plan. Since that didn't happen, we are all obviously wrong.

I hope I wasn't that much of a know it all when I was 24... oh well, I am sure I was.

Look, I was just surprised that you universally panned my selection, and said haystacking is the only way to go. If you are content with that bottom 70% safe route, then good for you. I feel I have an edge, and I'm exploiting it. Yipes if I wanted to hear diatribes about how indexing is the only way to go I could have just browsed the Vanguard Diehards forum...

 

[Khan]

Look, I was just surprised that you universally panned my selection, and said haystacking is the only way to go. If you are content with that bottom 70% safe route, then good for you. I feel I have an edge, and I'm exploiting it. Yipes if I wanted to hear diatribes about how indexing is the only way to go I could have just browsed the Vanguard Diehards forum...

What the heck is haystacking?

 

[wildcat]

Look my argument was basically this, Brinker, and Cramer for that matter, eat sleep and breath stocks, and thus would know more than a person with a normal job, who doesn't focus 100% of their energy on the market.

Dude, stop while you are ahead. Do what you want.

 

[haha]

Dude, stop while you are ahead.

Too late for that.

 

[ERD50]

Look my argument was basically this, Brinker, and Cramer for that matter, eat sleep and breath stocks, and thus would know more than a person with a normal job...

Maybe they know more, but that does not mean the investment advice they sell is any better.

Brinker/Cramer and others have a product to sell. It is tough to get someone excited enough to send you money or watch your show with a boring message like 'index funds are best for the long haul', even if it is true. What do you say next month? They really do need to spice it up a bit, or a lot in Cramer's case.

Why not come back with some data on how many mutual funds that existed 25 years ago (to avoid survivorship bias - very important) actually did outperform the index? And then explain how you would have known which ones they would have been 25 years ago.

I'll second another poster's comments. There is probably nothing wrong with your fund picks. They may or may not beat the indexes in the long run. We won't know for a long time, but most here think the odds are against it. Fees and taxes must be overcome - two strikes against them from the start.

-ERD50

 

[youbet]

And anyway, Brinker includes what he calls an "Active - Passive" portfolio which is all index funds or ETF's. He recommends it for folks wishing to avoid income taxes due to high turnover in managed funds and who are looking for simplicity.

Within his other three portfolios, he includes a generous slice (up to 50%) of VTSMX. So Bob is certainly not avoiding index funds.

His primary emphasis is that any fund you own, manged or index, should be no load and low cost.

 

[ERD50]

He wasn't asking our opinion on what we thought of his plan, he was asking for our agreement on his plan. Since that didn't happen, we are all obviously wrong.

I hope I wasn't that much of a know it all when I was 24... oh well, I am sure I was.

Ah, but I was so much older then, I'm younger than that nooo-oowww.

copyrighted by Dylan in 1964, when he was age 23.

-ERD50

 

[eridanus]

Look my argument was basically this, Brinker, and Cramer for that matter, eat sleep and breath stocks, and thus would know more than a person with a normal job, who doesn't focus 100% of their energy on the market.

Jim Cramer's infamous February 2000 picks:

http://www.thestreet.com/funds/smarter/891820.html

"A-ha, that just leaves us with tech. That's why we keep coming back to it. That's why, despite the 80% increase in the Nasdaq last year, we are looking at another record year now."




Edit: added quote

 

[sgeeeee]

You have something there!! Now that you mention it, everytime I see Alan on TV, I think to myself: "Gee, that guy looks like the kind of guy that would save money by sawing rolls of paper towels in half." That's too much for just coincidence. It's gotta be him!!

Come to think of it, I've never seen a picture of both of them together at the same time. . .

 

[heyyou]

Khan--Haystacking is a new, perhaps derogatory term for index investing. Bogle or someone suggested that managers of active funds were searching for needles in a haystack, while indexing was owning the haystack.
AJ--I wish you good luck on your journey through life. You already know who is smarter than the market. I'm sure your $65K portfolio will grow with that expert advice. What are you going to do after you get your million dollars? Life is not measured in dollars. Perhaps you could write books telling about your success and insights, like Robert Kyosaki does. The tone of your posts is similar to his writing.

 

[ERD50]

Jim Cramer's infamous February 2000 picks:

http://www.thestreet.com/funds/smarter/891820.html

"A-ha, that just leaves us with tech. That's why we keep coming back to it. That's why, despite the 80% increase in the Nasdaq last year, we are looking at another record year now."

And Brinker was getting people *out* of the market at that same time. And messed up a QQQ call later that year.

Gee, how can two people who eat sleep and breath stocks, and thus would know more than a person with (or retired from) a normal job... come to opposite conclusions? So, the OP still would need to pick who is going to be right.

Good luck with that - ERD50

 

[NinjaPigeon]

Perhaps you could write books telling about your success and insights, like Robert Kyosaki does. The tone of your posts is similar to his writing.

Hey, I thought we were trying to play nice with our new friend? You just threw down the gauntlet! Comparing someone to Kiyosaki? Dem's fighting words!

 

[laurence]

Kiyosaki looks like Bogle compared to this guy.

AJ, you tried very hard to troll the board, ignored any questions that were inconvenient to answer, and were rude to people who tried to help you. It's obvious you are just here for a fight. Go back to NFB or M* or wherever else losers who pose as winners hang out and bait each other. Have a nice life now.

 

[Texas Proud]

Yah this whole thread is pretty silly now I think about it. Sorry for coming off like an ass, blah blah I have a 100k a year job and I'm only 24. The thing is I by no means want to retire at 35, probably around 50, when I hopefully have 6+ million saved up. I basically just wanted a critique of my investment plan, from which the overwhelming response is put all your money in Vanguard index funds. I think I can do better, but perhaps I'm wrong and you can all laugh at my demise. I was just surprised that so few of you are invested in actively managed funds. There are a lot of great ones out there

Dodge and Cox
Fairholme
Third Avenue Value to name a few, but maybe their 10 year hot streak was just luck

Air... I am still reading this LONG thread... but there are some things that seem to be coming out.... YOU don't like people telling you that your great plan might not make what you say... and then get defensive about it... not good.. YOU asked the question to poke holes in your plan and many have done so...

Not all people are diehard indexers... I have about 30% in index and about another 30% in funds that are close to an index... I am up in my Vanguard account .92 as of today (and lost today which I did not worry about).. I don't know about my 401(k), but probably a bit better as I have a lot of company stock and we have done OK...

BTW, the 'good managed funds' you talk about will not be so in the future... you will not believe me on this... but take a look at Fidelity Magellen back in the early 80s... it was THE fund to be in... Peter Lynch was the best stock picker ever... beat the market all the time.... but finally burned out and another one came along and now it is so large and combersome that it can not even match the market.... (BTW, I think Peter got beat a couple of years even though his overall record did beat the 500)...

Another thing you keep forgetting is RISK... There are funds that take a lot of risk with your money and USUALLY give you a good return... so saying you got 20% return without telling me how much risk you took is meaningless... there were many people who sounded just like you back in 1999... they were making 100% a year and were going to retire by 35... well, they lost up to 75% of their money and are still working and will be for awhile...

And I remember the day the Dow dropped over 500 points from about.. hmm was it 2700?? Do you know how many people who did not have a diversified portfolio lost their shirt They were just like you... I can make 15% or 20% a year forever... that is why we have market corrections...

Don't get me wrong... I think you will get your million... and if you can keep your expenses down will get your 6 mill without a problem.... Let me ask... WHAT FOR

This will more than be what you need to retire if you are only spending about $40K or so including taxes... do you have something in your background that will make you a better person with 6 mill?

Let me get a semi joke in.... when Viagra came out there was a lot of talk about men becoming romantic... well, one woman said that if the man was a prick before Viagra, now he was a prick with a hard on.... so don't think money will make you better than others....

 

[bosco]

This is obviously just my personal opinon, but anyone that describes themselves as a "wunderkind" has a problem, and it's precisely the kind of problem that leads to bad investment decisions. He may be very good at some things, but NOBODY is great at everything. Being good at getting grades in law school, and making $100k/year doesn't make you George Soros any more than solving a Rubik's cube blindfolded makes you Einstein. There are a lot of very bright people on this board, including the silent majority that don't toot their own intellectual horns a lot. That said, his investment plan seems reasonable. But there is more to life than investments.

When I was 28, my net worth was about $2,000. However, I had kayaked the inside passage from Haines Alaska to Port Hardy, BC. I had skiied around on the Juneau icefield, done a lot of rock and ice climbing, lived in northwest British Columbia wilderness for several months facing off grizzlies for the glory of Alaska Fish and Game, and was a ski bum for a couple of seasons. I had hitchiked through the Sudan on the back of souk lorries and nearly died in a German hospital of an unknown ailment while having to explain my sypmtoms to non-english speaking doctors with a fever of 105.8. None of that got me any closer to ER--but in some ways, it WAS ER, or at least ESR (but certainly not FI). I typcially worked 4 months/year until I was 29. Every day was an adventure. Maybe I was lazy--I got a lot of the same criticisms many 40-50 ERs complain about here. Where some people carry cellphones, I carried shotgun shells in my pockets as part of my daily existence. I wouldn't trade those days for anything, despite the fact that if I had been in the yoke, I could have probaby retired 10 years ago instead of waiting until 54.

Ok, so I was a wunderkind in grade 2. At least according to my teachers and their "tests" (and my mom....but that's another story. She was a *&#$& psychologist--they shouldn't be allowed to have kids). I'm 54 now, and I'm just a normal human being. That's progress

Full disclosure: the IPA is talking. This is my first evening of a 2 months layoff. I am leaving the frozen arctic for 2 months (I'm out of Kotzebue, made it as far as Fairbanks where it's -35 F). It's novel to be somewhere where I am not a racial minority for a change. Everyone should try it! I will return to Kotzebue for 90 days in May, and then I AM FIRED!!!!!!

 

[newyorklady]

Yah this whole thread is pretty silly now I think about it. Sorry for coming off like an ass, blah blah I have a 100k a year job and I'm only 24. The thing is I by no means want to retire at 35, probably around 50, when I hopefully have 6+ million saved up. I basically just wanted a critique of my investment plan, from which the overwhelming response is put all your money in Vanguard index funds. I think I can do better, but perhaps I'm wrong and you can all laugh at my demise. I was just surprised that so few of you are invested in actively managed funds. There are a lot of great ones out there

Dodge and Cox
Fairholme
Third Avenue Value to name a few, but maybe their 10 year hot streak was just luck

100k a year out of law school? you must have gone to a pretty low caliber law school. nothing to brag about there. your ego astounds me.

 

[Lazarus]

Well, 100K per year. Most people don’t make that now. Wonder what the equivalent pay was 25 years ago when I was 24? I think I was making something like 25K back then. I thought I was pretty smart too.

I do know that a lot can happen in 25 years. Most people have one or more of the following things happen. Marriage, kids, divorce, layoffs, health issues, and some are already dead!

All of these things can slow your accumulation to fire, except for the last one. Then it doesn’t matter. Only the first two have happened to me and I am not yet a millionaire.

 

[Spanky]

100k a year out of law school? you must have gone to a pretty low caliber law school. nothing to brag about there. your ego astounds me.

A starting salary of $100K is very respectable: http://www.ilrg.com/rankings/law/median.php/1/desc/MSPrivate

However, it is peanuts compared to the compensation of the real Air Jordan (the basketball legend).

 

[donheff]

When I was 28, my net worth was about $2,000. However, I had kayaked the inside passage from Haines Alaska to Port Hardy, BC. I had skiied around on the Juneau icefield, done a lot of rock and ice climbing, lived in northwest British Columbia wilderness for several months facing off grizzlies for the glory of Alaska Fish and Game, and was a ski bum for a couple of seasons....

Good post Bosco. I worked a few months after college and then quit to go diving for six months. Bummed around here and there and had a ball. I got a "straight job" a few years later and didn't start seriously accumulating until I was nearly forty. Still managed to pull the cord at 56 (DW had a lot to do with that).

It is a tough call, whether to start busting your balls in your early twenties or cut loose for a few years. Early savings will get your FIREd sooner, but there is a lot to be said for adventure while you are young. I would like to have gone on some of those adventures you described. The good thing is that the 50s, 60s, and (maybe) 70s/80s isn't too late. I just had a good snowboarding session on Wednesday. 8)

 

[webbach]

One problem with Brinker, Cramer, or Peter Lynch or Warren Buffett for that matter. At best, they will no longer be managing money when AirJ or I (age 33) am FIRE, at worst, they will be dead! When you chase the top 5% of actively managed funds, it soon becomes more of a cult of personality, sadly probably related to the skills of an individual. What us young dreamers need are low-cost vehicles to implement what each of us thinks is the best allocation for our LONG TERM strategy.

Worst case scenario, a manager suddenly can't produce, or leaves a fund. If we hold these funds in a taxable account, do we sell and chase performance elsewhere and lose the difference between this manager's stellar performance in a cap gain tax hit, or do we chalk it up to "it was good while it lasted" and hold the loser that follows. At least with index funds, we know what we are getting out of the box, and this model won't change in the >50 years we are going to hold these funds.

Humbly returning to lurk mode...